I still want to know why you think corporations should not be taxed at all. That seems very extreme.

And I think there actually is federal money paid to certain sectors of agribusiness not to produce or not past certain levels. Only a single example, obviously, although, I may be wrong.

Well, there are some examples of actual corporate welfare, Elon Musk being the poster child. But as it's generally thrown around, no. But is paying someone NOT to produce actually welfare, or insidious central planning? What you call welfare others might call unecessary govt intervention and interference in free markets (or, more directly, just a way of distributing pork to various states).

And the reason for 0 corporate tax is because it's all double taxation. It's ultimately individuals who own companies, who are all taxed individually (and that's precisley how it works for 95% of companies). The reason you have corporate taxes has to do primarily with compliance and enforcement. History shows when rates increase, especially to high levels, evasion and avoidance increase. And obviously big corporations have foreign shareholders, so it's simply easier to tax the corporation than track down all the individual shareholders. But economically speaking, it's uneccessary and anti-growth.

Actually, zero corporate tax is not a fringe position in public finance circles. See so called integration.

Zeke, I have no idea what that means. Could you rephrase the suggestion as a metaphysical query?

My position goes something like this.

Corporations are entities recognized by the government and given protections and regulated as deemed necessary. Given that these recognized entities enjoy the protective status of the government and require regulations for the god of the polity, corporations as distinct entities have an obligation just citizens do to pay into the collective pot.

Kodiak makes a point about double taxation, which I have never thought of before. But a business while run by persons is not a person. It is a separate entity that enjoys unique protections and requires unique regulations.

I would not meltdown if corporations were not taxed so long as it is for the public good.

But until the government gets its shit together regarding spending, we need to tax everything, IMO.

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Orangesteel wrote:

We could have ended the game there and Tomlin’s band of assholes let them back in.

Actually, zero corporate tax is not a fringe position in public finance circles. See so called integration.

Zeke, I have no idea what that means. Could you rephrase the suggestion as a metaphysical query?

My position goes something like this.

Corporations are entities recognized by the government and given protections and regulated as deemed necessary. Given that these recognized entities enjoy the protective status of the government and require regulations for the god of the polity, corporations as distinct entities have an obligation just citizens do to pay into the collective pot.

Kodiak makes a point about double taxation, which I have never thought of before. But a business while run by persons is not a person. It is a separate entity that enjoys unique protections and requires unique regulations.

I would not meltdown if corporations were not taxed so long as it is for the public good.

But until the government gets its shit together regarding spending, we need to tax everything, IMO.

1. You mentioned Kodiak’a position was fringe. I was just pointing at that in academic circles that think often about tax, it isn’t fringe. There are numerous arrguments that imposing income tax on corporations is not optimal.

2. You raise I think a good rebuttable, but notice that you are suggesting a benefit basis for taxation. However, the whole progressive tax scheme is based on ability to pay. If you want to move to a benefit test basis, isn’t the reasonable response to try to tax the amount of the benefit?

Reasons are legion why some firms ornaize as corporate entities and others as partnerships, but presumably there is a delta of value between the two and that should be the basis for corporate tax if you believe benefit tax is the right way to tax things. Alternatively, you could tax corporations based on the cost of providing services to corporation eg a toll is an example of this kind of benefit tax

However, the current scheme is untethered to any cost or benefit. Thus, it is clear that it is ability to pay. If ability to pay, then integration appears to be appropriate given that the ability to pay must be the ability to pay at the level of the natural person who owns the corporation.

Corporations are entities recognized by the government and given protections and regulated as deemed necessary. Given that these recognized entities enjoy the protective status of the government and require regulations for the god of the polity, corporations as distinct entities have an obligation just citizens do to pay into the collective pot.

While I am not an expert on org & tax structure, the C Corp is the only one that is federally taxed. Other corporations and partnerships such as LLC, LLP and S-Corps can elect pass-thru taxation. Although S-Corps, and possibly other structures, are still double-taxed at the state level.

So you're argument that there is something special and privileged with Corporations necessitating tax doesn't really hold water. Like I said, I'm not an expert but the only reason I can see to structure as a C Corp is because you intend to raise money in the public markets (debt and/or equity). And the point was you don't need to tax the Corp, just raise the tax on the gain to the investor and you collect the same amount of money without the double taxation.

Corporations are entities recognized by the government and given protections and regulated as deemed necessary. Given that these recognized entities enjoy the protective status of the government and require regulations for the god of the polity, corporations as distinct entities have an obligation just citizens do to pay into the collective pot.

While I am not an expert on org & tax structure, the C Corp is the only one that is federally taxed. Other corporations and partnerships such as LLC, LLP and S-Corps can elect pass-thru taxation. Although S-Corps, and possibly other structures, are still double-taxed at the state level.

So you're argument that there is something special and privileged with Corporations necessitating tax doesn't really hold water. Like I said, I'm not an expert but the only reason I can see to structure as a C Corp is because you intend to raise money in the public markets (debt and/or equity). And the point was you don't need to tax the Corp, just raise the tax on the gain to the investor and you collect the same amount of money without the double taxation.

That’s correct. So the arguably benefit is the SEC; though some poorly advised taxpayers have C Corp.

Corporations are entities recognized by the government and given protections and regulated as deemed necessary. Given that these recognized entities enjoy the protective status of the government and require regulations for the god of the polity, corporations as distinct entities have an obligation just citizens do to pay into the collective pot.

While I am not an expert on org & tax structure, the C Corp is the only one that is federally taxed. Other corporations and partnerships such as LLC, LLP and S-Corps can elect pass-thru taxation. Although S-Corps, and possibly other structures, are still double-taxed at the state level.

So you're argument that there is something special and privileged with Corporations necessitating tax doesn't really hold water. Like I said, I'm not an expert but the only reason I can see to structure as a C Corp is because you intend to raise money in the public markets (debt and/or equity). And the point was you don't need to tax the Corp, just raise the tax on the gain to the investor and you collect the same amount of money without the double taxation.

That’s correct. So the arguably benefit is the SEC; though some poorly advised taxpayers have C Corp.

Let’s be clear: i’m ignorant as fuck about all this stuff. But my claim is normative not descriptive, Kodiak. So my argument may not hold water but not for the reason you point out.

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Orangesteel wrote:

We could have ended the game there and Tomlin’s band of assholes let them back in.

Awards season is in full swing in California, and the Golden State just took home a booby prize of its own.

California ranks dead last among U.S. states in quality of life, according to a study by U.S. News, ranking behind New Jersey (49th) and Indiana (48th).

The ignominious honor reflects California’s low marks in the sub-categories of environmental quality and social engagement. The latter category measures voting participation and community bonds.

Californians scored poorly in part because they’re simply insufferable, U.S. News suggested.

“In addition to a healthy environment, a person’s quality of life is largely a result of their interactions with those around them,” the magazine wrote in a blurb accompanying the results.

One way to measure quality life is whether residents can even afford to have a roof over their heads, and by that standard, California is failing.

A 2017 Harvard University report said that one-third of renters in the Los Angeles area are “severely rent burdened,” meaning they spend at least half their income on housing. The median rent for a one-bedroom apartment in Los Angeles County has increased 67%, according to Zillow’s Rent Index, the Los Angeles Times reports.

Homelessness has surged a stunning 75 percent in the last six years, the Los Angeles Times reports, and there are now at least 55,000 homeless people in the county.

U.S. News ranked each state in seven other areas, which were weighted based on a survey that determined their importance to the public: health care, education, economy, opportunity, infrastructure, crime and corrections, and fiscal stability.

Regarding its budget, California does have a balanced budget under Gov. Jerry Brown, a Democrat, but the Standard & Poor’s rating agency recently warned that the good times won’t last.

“California’s finances are roaring back,” the agency’s report said. “History would suggest, however, that any fiscal renaissance will be temporary.”

If the stock market shifts from gains to losses, Standard & Poor’s said, the budget could be negatively impacted in a major way because about half of the state’s revenue comes from the wealthiest 1% in California.

You raise I think a good rebuttable, but notice that you are suggesting a benefit basis for taxation. However, the whole progressive tax scheme is based on ability to pay. If you want to move to a benefit test basis, isn’t the reasonable response to try to tax the amount of the benefit?

Reasons are legion why some firms ornaize as corporate entities and others as partnerships, but presumably there is a delta of value between the two and that should be the basis for corporate tax if you believe benefit tax is the right way to tax things. Alternatively, you could tax corporations based on the cost of providing services to corporation eg a toll is an example of this kind of benefit tax

However, the current scheme is untethered to any cost or benefit. Thus, it is clear that it is ability to pay. If ability to pay, then integration appears to be appropriate given that the ability to pay must be the ability to pay at the level of the natural person who owns the corporation.

To the extent I am able to follow, that makes good sense. Not sure how relevant the following response is, but here goes:

Benefits (protections) yes, but also cost of regulations. Artificial persons must be regulated in addition to receiving whatever benefits they are entitled to (set aside figuring out what regulations are overreach for the sake of argument; but we don't want the Cuyahoga catching on fire again for the sake of the public good). Natural persons must be regulated as well, but I would imagine that at least some regulation is unique to artificial persons. E.g., can a natural person be responsible for a blow out at an extraction site in the Gulf and liable for clean up costs?

Regarding benefits, I would imagine at least some of the benefits (protections) companies receive are unique to their artificial status as well. Other benefits are not unique (use of roads, etc). A tax proportionate to the level of benefit received seems totally reasonable.

If some protections and regulations are unique to the artificial status of the company (i.e., it is an artificial person, not natural), then I am hard pressed to agree that the natural person is being double-taxed as Kodiak points out.

"Thus, it is clear that it is ability to pay. If ability to pay, then integration appears to be appropriate given that the ability to pay must be the ability to pay at the level of the natural person who owns the corporation."

Walk me through the necessary connections between the clauses, here.Conclusion: integration is appropriate.Premise: the ability to pay must be (why?) the ability to pay at the level of the natural person who own the corporation.

What connects the premise to the conclusion?

Forgive the question, this is just not something I am used to thinking about.

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Orangesteel wrote:

We could have ended the game there and Tomlin’s band of assholes let them back in.

Regulatory costs and fines/penalties are all separate from taxes. Companies are paying all that and it has little to do with taxes.

Taxes are little more than the government decides it will spend X, and then it tries to go find the money. The MAIN reason you have property taxes, corporate taxes, state taxes, local taxes, sales taxes, water taxes, gas taxes, tolls, excise taxes, capital gains, estate taxes, etc etc etc....is a result partly of progressive taxation, but primarily because one tax rate in the 70-80% range creates more incentive and opportunity for evasion. You're more likely to comply if you get a lot of little knicks instead of one gashing cut.

Everything else is noise. Economists and policy makers don't really talk about "fair share" when it comes to taxation. They talk about the tax base, efficiency, effectiveness and economic impact....a.k.a "what's the best way to raise however much money we need?" Whether or not corporations should be taxed isn't really relevant to the discussion - they're taxed because we can, and not taxing them hasn't been considered to be the most effective way to raise revenues.

There is not one single tax that can't be eliminated. The challenge for policy makers is if you eliminate one revenue source, it may be difficult to replace that money by raising rates somewhere else. Yes, I shit you not Pelosi once referred to tax cuts as "spending choices".

Surprising how close the "real income" is in most states. More surprsing how much higher it is in several east coast states.

But it should be pointed out we are talking state averages....those numbers tell you virtually nothing about NY City, SF, San Diego, Chicago, Boston, etc.. If you're not living near the beach in CA, it's probably reasonably affordable....except then what would the point of living in CA be - move to Arizona for the same weather, or Vegas where there are no taxes.

Regulatory costs and fines/penalties are all separate from taxes. Companies are paying all that and it has little to do with taxes.

Taxes are little more than the government decides it will spend X, and then it tries to go find the money. The MAIN reason you have property taxes, corporate taxes, state taxes, local taxes, sales taxes, water taxes, gas taxes, tolls, excise taxes, capital gains, estate taxes, etc etc etc....is a result partly of progressive taxation, but primarily because one tax rate in the 70-80% range creates more incentive and opportunity for evasion. You're more likely to comply if you get a lot of little knicks instead of one gashing cut.

Everything else is noise. Economists and policy makers don't really talk about "fair share" when it comes to taxation. They talk about the tax base, efficiency, effectiveness and economic impact....a.k.a "what's the best way to raise however much money we need?" Whether or not corporations should be taxed isn't really relevant to the discussion - they're taxed because we can, and not taxing them hasn't been considered to be the most effective way to raise revenues.

There is not one single tax that can't be eliminated. The challenge for policy makers is if you eliminate one revenue source, it may be difficult to replace that money by raising rates somewhere else. Yes, I shit you not Pelosi once referred to tax cuts as "spending choices".

I'm going to humbly point out that none of what you posted shows why corporations should not at all be taxed.

Further, if companies have to pay regulation costs, why are you not complaining that citizens financially invested in these companies are just being double taxed by another means?

I'll just restate my dumb, stubborn position:(1) Business is protected by the government and those protections cost money so corporations have an obligation to pay in if they want those protections.(2) Business requires regulations and regulations cost money and so business must pay in (Does it really matter that factually regulation costs are separate from taxation? It is still money taken from the corporation to pay the cost of stuff the government imposes.)

You are making a point about how taxation actually works (god knows, you know more about it than me, without a doubt).

I do not care about that.

You said corporations should not be taxed at all. I have said why I think that is wrong. My argument may be really lousy, but you have not yet shown why, unless I am misunderstanding you (which is also, obviously, a real possibility).

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Orangesteel wrote:

We could have ended the game there and Tomlin’s band of assholes let them back in.

I'm going to humbly point out that none of what you posted shows why corporations should not at all be taxed.

I've not only explained why corporations don't need to be taxed and shouldn't be taxed, but explained WHY they are taxed. Despite your claims to the contrary, you probably need to go back and re-read.

Businesses DO PAY for regulatory costs and other protections, and often do so directly, and both public (such as registration costs, fines) and private sector (such as audits, certifications, etc). And there's also a social welfare purpose for a lot of the rest, which benefits consumers and citizens, which is why THEY pay for those services with their taxes.

And I'll just blow up this argument one last final time by pointing out, again, 95% of companies ARE NOT TAXED. So I think that proves taxing corporations is not necessary. When people form companies, they choose to be an LLC, LLP, C Corp or an S Corp. Except for the C Corp, the other forms all CHOOSE how they will be taxed, and for 95% of companies it's pass-thru, which means all profits accrue to the owners and taxed just once, at the individual level. I feel like I've already explained this once or twice.

I’ll reread. But even if 95% are not taxed, that’s descriptive, not normative. My claims are normative. The fact that most are not taxed does not mean they ought not be. Surely you see the distinction. Whether it is necessary is relative to the standard. Surely you see that, too.

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Orangesteel wrote:

We could have ended the game there and Tomlin’s band of assholes let them back in.

As most small biz owners know.....the "problem" at the end of most years is what do do with that extra profit in the business account. You do nothing and it gets taxed. So you either give yourself a nice bonus(personal taxes withheld like any other paycheck) , donate to a charity, upgrade equipment, or a little of everything to get your profit/loss balanced. Pass thru...no corporate tax.

I’ll reread. But even if 95% are not taxed, that’s descriptive, not normative. My claims are normative. The fact that most are not taxed does not mean they ought not be. Surely you see the distinction. Whether it is necessary is relative to the standard. Surely you see that, too.

You can argue we should be taxing them all you want, but against most every economist would disagree with you. Taxing income is suboptimal and hurts growth. Because it's double taxation, you simply don't need it to collect the same revenues. I can tax the business owner AND his business, or I can collect the same amount of money just taxing him once at a higher level on his personal income.

Your argument doesn't appear to be based on anything correct or logically sound. There is not one good reason for taxing corporations, other than it makes it easier for Uncle Sam to collect and audit. What you "feel" isn't any kind of argument. You've not come up with a single good reason why it should be that way.

So do 95% of the corporations not pay taxes because they do not make enough or is it because they make enough investments or have lost enough money to qualify for tax breaks?

I think it's mostly because, for example, a Corporation makes 10 million gross income, they have a 5 million payroll, 3 million in expenses, and then that last 2 million they either invest in new technology, equipment, expansion, or bonuses to employees so they don't have a surplus which would be taxed at corporate rates. So if it's passed through to the employees it's taxed at personal income tax rates.

So if it's passed through to the employees it's taxed at personal income tax rates.

I don't know what the form is called. but if I elected pass-thru taxation and my company makes $2M....then I have $2M on my personal income taxes, regardless of what amount I took in distributions out of the company. Kodiak LLC does not file or pay taxes (that's what pass-thru means).

So if it's passed through to the employees it's taxed at personal income tax rates.

I don't know what the form is called. but if I elected pass-thru taxation and my company makes $2M....then I have $2M on my personal income taxes, regardless of what amount I took in distributions out of the company. Kodiak LLC does not file or pay taxes (that's what pass-thru means).

I see. This is what Trump did when his Casino went under and he wa sable to take it was a tax break for the next 10 years. Thanks. did not know that.

_________________To doubt everything or to believe everything are two equally convenient solutions; both dispense with the necessity of reflection.- Henri Poincaré